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Member, Beacon International Group, Ltd.
CALGARY, AlbertaSuncor Energy Inc. said it has settled with its insurers business interruption claims stemming from a fire at one of its oil sands upgrading facilities in January 2005.
Calgary, Alberta-based Suncor said the total amount of the settlement was about $980 million Canadian ($866.0 million) before tax. About $385 million Canadian ($340.2 million) of that total will be recorded in the company's first-quarter results slated for May 4, Suncor said, while about $594 million Canadian ($524.9 million) is slated for 2005.
"The settlement of our business interruption claims is a major milestone in the fire recovery," Ken Alley, senior vp and chief financial officer of Suncor, said in a statement.
The fire at Suncor's oil sands facility in Fort McMurray, Alberta, where the company extracts and upgrades sands into synthetic oil, also caused property damage. Suncor said in the statement that it was working with its insurers to settle the property claim.
The company said it had received about $115 million Canadian ($101.6 million) from its property loss policy in 2005, and that total property claims resulting from the fire are not expected to exceed the full policy limit of about $290 million Canadian ($256.3 million).
Suncor said that, in all, it expects to recoup about $1.2 billion Canadian ($1.06 billion) in insurance for business interruption and property claims, "which significantly mitigates the financial impact of the fire."